The primary cause of stress, points out James Werner, CEO of Wealth Habit, is finances. With the average employer spending just under 9% of payroll on extended disability absences - most of which are related to stress - Werner believes an increased focus on financial wellness in the workplace has the potential to not only help employees save, but also save their employers "hundreds of thousands, or even billions, of dollars a year."
Wealth Habit works as an online application that automatically tracks established weekly and monthly spending goals to help individuals take control of their finances. There's even a gaming option where users can accumulate points and compete with their co-workers. Werner spoke with EBA about the product, and how brokers and consultants can get involved.
How did Wealth Habit start?
It was founded about two years ago in Portland, Ore. ... The impetus behind the Wealth Habit project was an obvious explosion in awareness of and dedication to physical and mental wellness in the workplace, and our belief that financial wellness is the next great wave of activity in the business marketplace.
Nobody does exactly what we do, but there are different sorts of products on the market people can use to manage their budgets generally. Many of those are "free." Put in quotes because they sell, rent and share data. Our decision was to offer a subscription service that would ensure people that their data was safe and secure, that the advice they received from us was unbiased. It would ensure that the interface that they had with the product was uncluttered and free of advertising.
The subscription model fits most neatly with an employer-centric model because employers can pay a single subscription fee and cover many, many employees with that one fee. It is based on the size of the company, you could look at it as a [PMPM] charge [where] small wouldn't pay much, a large company would pay more.
What's your distribution model?
We have had a lot of interest from benefits consultants and from PEOs and we've established some relationships with PEOs in particular who consider this to be a really powerful competitive differentiator.
This is a very low-cost option with a super high, immediate return and so it's something that people like to add to their portfolio of products if they're a PEO or a consultant.
There is no fixed compensation model, depending on how actively a consultant wanted to be involved with us there certainly can be a fee-based structure or commission-type fee. Or at a less formal level there can simply be a referral relationship.
What is your value proposition?
Everyone intuitively knows many of their employees are in financial distress and they also intuitively know that's costing them something, but they don't always necessarily know how much that is.
It turns out there's a lot of research that actually quantifies exactly how much is lost to you in terms of lost productivity, in terms of increased health care costs. And the most important part of getting a person's financial health under control is getting that person to take charge of his basic spending and savings decisions.
The metaphor that we use is if you want to lose a few pounds you don't start with the Navy SEAL training manual. You start with a more basic, fundamental and practical diet plan. That's the way we see Wealth Habit.
It's the way to get your daily spending and savings under control and everything else flows from that to greater financial health.
How do you present it?
There are lots of statistics about people who are under financial distress, and that's up to 50% of Americans who report having trouble meeting their monthly expenses in a timely fashion.
Those people have twice the rate of heart attacks; they have five times the rate of major depression of people who are not in financial distress. They have digestive disorders. They have migraines. They also do something which employers don't like which is they spend up to five hours a week working on their [financial problems] at work.
So our hope for every employer is that they can get at least a portion of that distress under control. If you can control even 10% of it you would save the economy hundreds of billions of dollars a year and individual employers hundreds of thousands - and sometimes even tens of millions of dollars a year.
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